FM-MIDTERM P3-4

It is the deposit-taking financial institution that grants debt-related funds and receives interest income. In the case of the bond market, this creditor is called a bond investor.

• Debtor

• Creditor

• Current ratio

• Debt Refunding

They are comprised of assets that are converted into cash in a period of less than one year. They consist of cash, marketable securities, accounts receivable, inventories, prepayments, and the related.

• Current liabilities

• Current ratio

• Current assets

• Creditor

They are comprised of liabilities that are paid in a period of less than one year. They consist of accounts payable, short-term loan, taxes payable, and the related.

• Current liabilities

• Current assets

• Default

• Derivatives

It is the percentage of current assets over current liabilities.

• Current liabilities

• Current assets

• Current ratio

• Creditor

It is a bond issued without offering any collaterals.

• Derivatives Securities

• Debenture bond

• Discount rate

• Diluted EPS

It is a process of refinancing debt-related instruments with other forms of debt in the realm of reducing interest rate cost.

• Debt Refunding

• Discounted cash flow

• Default

• Dividend yield

It is the party that uses debt-related funds, normally a loan, and incurs a floating or fixed interest rate.

• Creditor

• Debtor

• Discount rate

• Depreciation

It is the inability to make the principal and interest payments of a loan, bond, or lease payable.

• Derivatives

• Default

• Deferred income tax

• Dividend payout

It is a non-cash charge coming from the tax liability difference of fixed asset depreciation between straight-line and accelerated depreciation methods.

• Depreciation

• Diluted EPS

• Deferred income tax

• Dividend Discount Model

It is the wearing-out expense of a fixed asset, computed as its cost less salvage value divided by the useful life of the asset.

• Depreciation

• Default

• Debt Refunding

• Dividend yield